AG Paxton Withholds Name Behind Legal Donor
AUSTIN, Texas (AP) — Texas' attorney general disclosed Wednesday that a Washington-based conservative group is helping pay his legal defense on criminal securities fraud charges but would not say who is behind the political organization, which has virtually no public profile.
The omission raises questions about transparency as Republican Ken Paxton, who has pleaded not guilty, awaits trial on felony charges of misleading investors. He has received nearly $550,000 the past two years from friends and others to cover his legal expenses and $10,000 of that comes from The Annual Fund Inc., which Paxton reported as a gift that meets exceptions to Texas anti-bribery laws.
Paxton spokesman Matt Welch described The Annual Fund as supporting "the cause of limited, constitutional government. So does Attorney General Paxton." He did not answer subsequent questions by email about the principals behind the organization or why he would not disclose the names.
"It's another level of secrecy that should not be there. Disclosure is meaningless if we don't know the principals," said Craig McDonald, executive director of the left-leaning watchdog group Texans for Public Justice.
In 2015, Paxton accepted a $100,000 contribution for his legal bills from the head of a company his office was investigating for Medicaid fraud despite internal agency rules that prohibit such gifts. His office at the time said Paxton was aware of the policy but that no rules were violated.
Tax records provide potential clues about The Annual Fund. The group appears to have ties with the Wellspring Committee, which gives money to conservative legal causes, including the Judicial Crisis Network. In March, the Judicial Crisis Network launched a $1 million ad campaign to persuade Democrats to vote for President Donald Trump's pick for the U.S. Supreme Court, Neil Gorsuch.
The Virginia address Paxton listed for The Annual Fund shares the same address for the Wellspring Committee, which is led by Ann Corkery and reported giving $49,000 to a group called The Annual Fund in 2015. Neil Corkery, the same name as Ann's husband, is listed as the contact in 2011 tax filings for a group called The Annual Fund, which at the time stated its mission as conducting voter research and registration.
A phone message left with a number for Wellspring was not retuned.
Paxton is prohibited from using taxpayer dollars or campaign contributions to defend himself. Last year, state ethics regulators denied giving Paxton their blessing to let political donors pay his criminal defense — but they also didn't outright ban him from doing so.
Paxton reported on his disclosure statement that "all gifts for legal defense were conferred and accepted on account of a personal, professional, or business relationship independent of General Paxton's official status." McDonald accuses Paxton of exploiting a loophole and said his group will consider filing a formal challenge.
Paxton was scheduled to stand trial in September but is awaiting a new trial date after his case was transferred to a judge in Houston.
Paxton is accused of misleading investors in 2011 — four years before he was elected attorney general — by not disclosing that he was being paid by a tech startup called Servergy Inc. to recruit new investors. A judge threw out nearly identical federal charges brought by the U.S. Securities and Exchange Commission.
(© Copyright 2017 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)